Power Rates Across Mindanao Expected to Drop Next Month

Electric bills across Mindanao are expected to drop starting next month as the National Grid Corporation of the Philippines (NGCP) is expected to start implementing two orders from the Energy Regulatory Commission slashing the ancillary rates earlier granted to an Aboitiz Power affiliated company.

In two decisions rendered October 4, 2010 copies of which were provided this paper by Rep. Rufus Rodriguez (2nd District, Cagayan de Oro) and Rep. Maximo B. Rodriguez, Jr. (Abamin party list) members of the House Energy Committee, the ERC amended its earlier provisionary rates granted to Therma Marine, Inc. (TMI) for ancillary services.

"For ERC Case No. 2010-011 covering Power Barge 118, the ERC slashed a total of 0.52518 per kilowatt per hour from the total fixed costs originally applied for by TMI. Similary, the ERC slashed 0.49085/kW/hr from the rate originally applied for by TMI for PB 117 under ERC Case No. 2011-14," said Rep. Rufus Rodriguez.

This could mean a reduction in the landed rate to end users of about 50 centavos per kilowatt hour," noted a senior executive of a local distribution utility. "Ancillary service charges are pass-through charges so these reductions will also be enjoyed by end-users. Once the NGCP uses these rates, the effect will be automatic to end users."

"However, since the charges of NGCP will be spread over the total energy sold in the Mindanao Grid, which includes energy sold by plants still operated by Napocor and other IPP's, the reduction in the ERC decision will be diluted. Initial estimates indicate that the reduction in the landed rate to end-users will be about three centavos, to be spread over seven months," he added.

The ERC rendered the decision after deliberating on it for six months upon pressure by the Rodriguez siblings who also sit in the House Appropriations Committee.

The ERC decisions also denied the collection deficiency mechanism earlier proposed by NGCP which sought to bill a 3.3% surcharge on all ancillary services availed due to "collection deficiencies" as well as the rate premium for capacity dispatched by the NGCP in excess of 50MW for each power barge.

Most welcome to consumers across the island was the ERC directive to NGCP to submit within 15 days (or by October 23) a refund scheme for collections already made under the provisional authority which account for the difference between the higher provisional rates and lower approved rates.

The provisional authority granted by the ERC to the TMI is widely perceived to have caused the uproar from enraged consumers who had their electric bills doubled or even tripled on the hills of the power curtailment which caused debilitating blackouts across the island last summer.

Among the groups in the forefront of the opposition to the PA granted for the ASPA were Coalition 6/25, Konsumanteng Kagay-anon, Inc., the Association of Mindanao Rural Electric Cooperatives (Amreco), National Association of Electricity Consumers for Reforms, Inc. (Nasecore) as well as DUs like Cepalco, Daneco, Laneco and other intervenors like Hio Tiao Lim of Davao City and the Zamboanga Chamber of Commerce and Industry Foundation, Inc.

A Manifesto filed by the "Sovereign People of Mindanao" against the tremendous increase of electricity rates in Mindanao with over 100,000 signatures from the Social Action Centers of the Archdiocese of Cagayan de Oro and submitted through Abamin Rep. Maximo Rodrguez Jr. is also believed to have played a moral suasion on the ERC decision.

"We really have to credit the publicity drummed up by the Coalition 6/25 for the just decision by the ERC," said Engr. David Tauli of Coalition 6/25, one of the most vocal oppositors of the ASPA. "They were initially inclined to approve the ASPA application as filed, but when the excessive profits were made public, the ERC had to reconsider their first decision. And it took them six months to decide on an issue that was quite apparent to an intelligent layman: "recovery" of fictitious investments (in the amount of around US$60 million) could not be allowed."

"God bless the ERC!" said another Coalition 6/25 stalwart. "This is a victory for all the people of Mindanao."

A media statement released late Friday by TMI's public relations firm said the Aboitiz affiliate plans to appeal the decision with the ERC.

"We will oppose their motion for reconsideration," said Rep. Rufus Rodriguez in a text message to Coalition 6/25.